Slideshare uses cookies to improve functionality and performance, and to provide you with relevant advertising. If you continue browsing the site, you agree to the use of cookies on this website. See our User Agreement and Privacy Policy.

Slideshare uses cookies to improve functionality and performance, and to provide you with relevant advertising. If you continue browsing the site, you agree to the use of cookies on this website. See our Privacy Policy and User Agreement for details.

tenet healthcare _Rel_2008_Q4_FINAL_

1.
åÉïëêÉäÉ~ëÉ eÉ~Çèì~êíÉêë=lÑÑáÅÉ=
NPTPT=kçÉä=oç~ÇI=píÉKNMM=
a~ää~ëI=qu=TROQM=
íÉäW=QSVKUVPKOMMM=
Ñ~ñW=QSVKUVPKUSMM=
ïïïKíÉåÉíÜÉ~äíÜKÅçã
Contacts:
Media: David Matthews (469) 893-2640
David.Matthews@tenethealth.com
Investors: Thomas Rice (469) 893-2522
Thomas.Rice@tenethealth.com
Tenet Announces Results for Fourth Quarter
Ended December 31, 2008 and 2009 Outlook
Highlights:
♦ 0.1 percent growth in same-hospital paying admissions
o 0.2 percent decline in same-hospital total admissions
♦ 0.9 percent growth in same-hospital paying outpatient visits
o 0.3 percent decline in total same-hospital outpatient visits
♦ 2.1 percent growth in same-hospital surgeries
o 3.7 percent growth in same-hospital outpatient surgeries
♦ 3.0 percent decline in same-hospital commercial managed care admissions
o 0.2 percent decline in same-hospital commercial managed care outpatient visits
♦ 6.6 percent increase in same-hospital commercial managed care revenues
♦ $199 million in total adjusted EBITDA, an increase of 27.6 percent
o $201 million in same-hospital adjusted EBITDA, an increase of 27.2 percent
♦ $29 million use of cash in adjusted free cash flow from continuing operations
♦ $130 million in capital expenditures in continuing operations
♦ $507 million in cash and equivalents at Dec. 31, 2008, down $5 million from Sept. 30, 2008
♦ Bad debt ratio of 7.6 percent of net revenues, an increase of 110 basis points from Q4’07
DALLAS – February 24, 2009 – Tenet Healthcare Corporation (NYSE:THC) today reported a loss of
$33 million, or $0.07 per share, for its fourth quarter of 2008, compared to a net loss of $75 million, or $0.16 per
share, for its fourth quarter of 2007. Adjusted EBITDA, a non-GAAP term defined below, was $199 million for
the fourth quarter of 2008, an increase of $43 million, or 27.6 percent, as compared to $156 million for the fourth
quarter of 2007. On a same-hospital basis, adjusted EBITDA was $201 million, an increase of $43 million, or
27.2 percent, as compared to $158 million in the fourth quarter of 2007.
For the year 2008, net income was $25 million, or $0.05 per share, compared to a net loss of $89 million,
or $0.19 per share for 2007. Adjusted EBITDA, a non-GAAP term defined below, was $732 million in 2008,
compared to $657 million for 2007, an increase of $75 million, or 11.4 percent. The adjusted EBITDA margin for
2008 was 8.4 percent, an increase of 40 basis points from an adjusted EBITDA margin of 8.0 percent in 2007.
“Growth in paying volumes remained positive despite the challenges of a severe decline in the economy
in the fourth quarter. Paying admissions grew by 0.1 percent and paying outpatient visits grew by 0.9 percent. We

2.
are particularly gratified by this growth in our outpatient business which had experienced negative volume growth
in recent years,” said Trevor Fetter, president and chief executive officer. “We view this volume growth, in the
context of a challenging economic environment, as compelling evidence that our strategies continue to prove
effective in advancing the Company towards sustained profitability.”
“Surgeries grew by a very strong 2.1 percent in the fourth quarter, highlighting growth in a number of our
higher priority, targeted service lines,” said Stephen L. Newman, M.D., chief operating officer. “This growth can,
in part, be attributed to our continued success at expanding our active medical staff. In 2008, our active medical
staff grew by 1,122 physicians or 9.0 percent. As this growth is net of attrition, we believe this expansion of our
medical staff could be an important leading indicator of continuing volume growth. Since the beginning of 2007,
we have grown the number of physicians on our active medical staff by 17.0 percent.”
“Both our fourth quarter and full year results benefited from continued strong pricing and solid cost
control,” said Biggs C. Porter, chief financial officer. “We constrained growth in same-hospital controllable
operating expense per adjusted patient day to just 0.8 percent. This focus on cost control made a significant
contribution to improved profitability in the quarter, with our adjusted EBITDA margin rising to 9.1 percent. Our
progress on pricing and cost efficiencies is expected to provide continuing benefits into 2009 including
incremental cost efficiencies, which we expect to total approximately $150 million by year end. Although we now
expect there may be increasing pressure on bad debt and commercial volumes in 2009, our outlook for 2009
adjusted EBITDA is in the range of $735 million to $800 million.”
Adjusted EBITDA
Adjusted EBITDA, a non-GAAP term defined below, was $199 million, or a margin of 9.1 percent of net
operating revenues, in the fourth quarter of 2008. This represents an increase of $43 million, or 27.6 percent, from
adjusted EBITDA of $156 million in the fourth quarter of 2007, and margin increase of 160 basis points as
compared to an adjusted EBITDA margin of 7.5 percent in the fourth quarter of 2007.
Same-hospital adjusted EBITDA was $201 million in the fourth quarter of 2008, an increase of $43
million, or 27.2 percent, from the $158 million in the fourth quarter of 2007. Same-hospital adjusted EBITDA
margin increased by 170 basis points to 9.3 percent in the fourth quarter of 2008 as compared to the same-hospital
adjusted EBITDA margin of 7.6 percent in the fourth quarter of 2007. For 2008, same-hospital adjusted EBITDA
was $752 million, an increase of $93 million, or 14.1 percent, as compared to $659 million for 2007.
Adjusted EBITDA is a non-GAAP term defined by the Company as net income (loss) before: (1) the
cumulative effect of changes in accounting principle, net of tax; (2) income (loss) from discontinued operations,
net of tax; (3) income tax (expense) benefit; (4) net gains (losses) on sales of investments; (5) minority interests;
(6) investment earnings; (7) interest expense; (8) litigation and investigation (costs) benefit, net of insurance
recoveries; (9) hurricane insurance recoveries, net of costs; (10) impairment of long-lived assets and goodwill and
restructuring charges, net of insurance recoveries; (11) amortization; and (12) depreciation. A reconciliation of net
income (loss) to adjusted EBITDA is provided in Table #1 at the end of this release.
Same-Hospital Data
Same-hospital continuing operations data excludes two hospitals: (1) Coastal Carolina Medical Center,
which we acquired on June 30, 2007; and (2) Sierra Providence East Medical Center, in El Paso, which opened on
May 21, 2008. Same-hospital continuing operations data is the primary form of tabular data presentation in the
narrative sections of this document. There are currently 48 hospitals in same-hospital continuing operations. The
Company intends to add Coastal Carolina Medical Center to same-hospital continuing operations beginning on
January 1, 2009.
Total-hospital data, including the contribution of Coastal Carolina Medical Center and Sierra Providence
East Medical Center, is provided in the tabular presentation of data at the end of this document. As a result of this
approach, certain amounts in the narrative section of this document will not tie to amounts in the condensed
consolidated statement of operations.
-2-

5.
Pricing
Same-Hospital
Pricing
Continuing Operations
($)
Q4’08 Q4’07 Change (%)
Net Inpatient Revenue per Admission 11,052 10,665 3.6
Net Inpatient Revenue per Patient Day 2,263 2,165 4.5
Net Outpatient Revenue per Visit 691 646 7.0
Net Patient Revenue per Adjusted Patient Admission 10,933 10,643 2.7
Net Patient Revenue per Adjusted Patient Day 2,252 2,177 3.4
Managed Care: Net Inpatient Revenue per Admission 11,803 11,284 4.6
Managed Care: Net Outpatient Revenue per Visit 808 759 6.5
Pricing improvement was evident across all key metrics, primarily reflecting the improved terms of our
commercial managed care contracts. Outpatient pricing again outpaced the growth in inpatient pricing due to an
improving mix of procedures performed in our outpatient facilities. Our investment and development of higher-
end procedures in both the surgery and imaging segments of our outpatient business, as well as recent
acquisitions, have contributed to this improving mix.
Controllable Operating Expenses
Same-Hospital
Continuing Operations
Controllable Operating Expenses
Q4’08 Q4’07 Change (%)
Salaries, Wages & Benefits ($mm) 957 942 1.6
Supplies ($mm) 384 364 5.5
Other Operating Expenses ($mm) 467 473 (1.3)
Total Controllable Operating Expenses ($mm) 1,808 1,779 1.6
Rent / Lease Expense (a) ($mm) 35 34 2.9
Unit Cost Statistics
Salaries, Wages & Benefits per Adjusted Patient Day ($) 1,035 1,027 0.8
Supplies per Adjusted Patient Day ($) 415 397 4.5
Other Operating Expenses per Adjusted Patient Day ($) 505 516 (2.1)
Total Controllable Operating Expenses per Adjusted Patient Day ($) 1,955 1,940 0.8
(a)
Included in Other Operating Expenses
On a per adjusted patient day basis, salaries, wages and benefits increased 0.8 percent in the fourth quarter
of 2008 as compared to the fourth quarter of 2007. This increase is primarily due to merit increases for our
employees, and increased health benefits costs, partially offset by a decline in full-time employee headcount,
reduced contract labor expense, and improved worker’s compensation loss experience, and lower incentive
compensation costs. Contract labor expense, which is included in salaries, wages and benefits, was $30 million in
the fourth quarter of 2008, a decrease of $6 million, or 16.7 percent, as compared to the fourth quarter of 2007.
Supplies expense per adjusted patient day increased by 4.5 percent in the fourth quarter of 2008 as
compared to the fourth quarter of 2007. The increase in supplies expense is primarily due to the increased number
of surgeries as well as the costs of certain new, higher cost drugs. A portion of the increase in supplies expense is
offset by revenue growth related to pass-through payments we receive from certain payers.
“Other Operating Expenses” per adjusted patient day decreased by 2.1 percent in the fourth quarter of
2008 as compared to the fourth quarter of 2007. Included in this decrease was a significant decline in malpractice
expense. On a total hospital basis, malpractice expense declined from $36 million in the fourth quarter of 2007 to
$18 million in the fourth quarter of 2007, a decline of $18 million, or 50.0 percent. This decrease is primarily
attributable to improved claims experience and was partially offset by $4 million of incremental expenses related
to a lower interest rate environment that increased the discounted present value of projected future liabilities. The
-5-

6.
favorable impact of declining malpractice expense was partially offset by increases in other items including
higher physician fees reflecting increases in Emergency Department on-call payments, increases in costs of
contracted services, as well as repair and maintenance costs. Declining consulting costs also had a favorable
impact on “Other Operating Expenses.”
Provision for Doubtful Accounts
Same-Hospital
Continuing Operations
Bad Debt
Q4’08 Q4’07 Change (%)
Provision for Doubtful Accounts (“Bad Debt”) ($mm) 163 133 22.6
1.1 (a)
Bad Debt / Net Operating Revenues (%) 7.5 6.4
(2) (a)
Collection Rate from Self-Pay (%) 33 35
- (a)
Collection Rate from Managed Care Payers (%) 98 98
(a) This change is the difference between the Q4’08 and Q4’07 amounts shown.
Bad debt expense increased by $30 million, or 22.6 percent, despite declines in uninsured admissions and
outpatient visits of 5.9 percent and 10.8 percent, respectively. The increase in bad debt expense resulted from the
decline in our self-pay collection rate which declined to approximately 33 percent from 35 percent in the fourth
quarter of 2007, higher pricing, higher patient insurance deductibles, and a favorable adjustment to bad debt
expense in the fourth quarter of 2007 which did not recur.
Accounts Receivable
Consolidated accounts receivable were $1.337 billion at December 31, 2008, and $1.356 billion at
September 30, 2008. Accounts receivable days outstanding from continuing operations were 50 days at
December 31, 2008, compared to 51 days at September 30, 2008 and 52 days at December 31, 2007.
Cash Flow
Cash and cash equivalents were $507 million at December 31, 2008, a decrease of $5 million from $512
million at September 30, 2008. Adjusted Free Cash Flow, a non-GAAP term defined below, was negative $29
million in the fourth quarter of 2008 compared to negative $164 million in the fourth quarter of 2007.
Adjusted Free Cash Flow, a non-GAAP term, is defined by the Company as cash flows provided by (used
in) operating activities less (1) capital expenditures in continuing operations, (2) new and replacement hospital
construction expenditures, (3) income tax refunds (payments), (4) net cash provided by (used in) operating
activities from discontinued operations, and (5) payments against reserves for restructuring charges, litigation
costs and settlements. The reconciliation of net cash provided by (used in) operating activities, the most
comparable GAAP term, to Adjusted Free Cash Flow is provided in Table #2 at the end of this release.
Significant cash flow items in the fourth quarter of 2008 included:
(1) Capital expenditures of $134 million, consisting of $130 million in continuing operations and $4
million in discontinued operations;
(2) Interest payments of $70 million;
(3) $22 million in principal payments (excluding interest of $2 million) classified as operating cash
outflows from continuing operations related to our 2006 civil settlement with the federal government,
these principal payments totaled $88 million for the full year 2008;
(4) A $39 million decline in the cash and cash equivalents balance related to our Medicare HMO
insurance subsidiary operating in Louisiana, primarily due to the timing of monthly payments from
CMS, which is classified as a discontinued operations cash outflow from operations;
(5) Cash distributions of $34 million we received related to our investment in the Reserve Yield Plus
Fund, which are classified as investing activity cash flows; and
-6-

7.
(6) Insurance recoveries of $14 million related to our December 2004 Redding Medical Center litigation
settlement; based on the components of the recoveries, $5 million was classified as operating cash
flows from continuing operations and $9 million was classified as operating cash flows from
discontinued operations.
Outlook for 2009
The Company’s outlook for 2009 is materially dependent on a number of items which are difficult to
project given the uncertain macro-economic environment. Among the most important of these items are aggregate
patient volumes, payer and patient mix, and bad debt expense.
As a basis for our 2009 Outlook, we have assumed same-hospital admissions growth of approximately
flat to one percent, and same-hospital outpatient visit growth of flat to one percent. In 2008, same-hospital
admissions grew by 1.2 percent and same-hospital outpatient visits declined by 0.1 percent.
Based on these volume assumptions, the 2009 outlook for growth in net operating revenues is in the range
of 4 to 6 percent. This is consistent with an outlook for total-company net operating revenues in the range $9.0
billion to $9.2 billion. Total-company net operating revenues were $8.663 billion in 2008 representing growth of
6.1 percent over 2007, or growth of 5.6 percent on a same-hospital basis.
The outlook for growth in controllable operating expenses per adjusted patient day is in the range of 2 to
3 percent for 2009. This compares to 2.6 percent growth in same-hospital controllable operating expenses per
adjusted patient day in 2008. On a total-company basis, this corresponds to an expected range for 2009
controllable operating expenses of $7.5 billion to $7.6 billion. Our 2009 outlook reflects the Company’s
expectations for continued cost efficiencies, including the Company’s recent initiatives targeting a reduction of
approximately $150 million in gross cost savings and the favorable impact of enhanced operating leverage that is
expected to result from the assumed growth in patient volumes.
The 2009 outlook for total-company bad debt expense is in the range of 8.3 to 9.3 percent of net operating
revenues, or total company bad debt expense in the range of $750 million to $850 million. In 2008, total-company
bad debt expense was $632 million, or 7.3 percent of net operating revenues. In the fourth quarter of 2008, total-
company bad debt ratio was 7.6 percent.
Adjusted EBITDA (a non-GAAP term reconciled to net loss as defined by GAAP in Table #3 at the end
of this release) is expected to be in the range of $735 million to $800 million in 2009, on a total-company basis.
Based on the outlook for net operating revenues cited above, this corresponds to an adjusted EBITDA margin
range of 8.2 to 8.7 percent. In 2008, Tenet’s adjusted EBITDA was $732 million, for an adjusted EBITDA margin
of 8.4 percent.
The outlook for depreciation and amortization expense in 2009 is approximately $400 million to $420
million, and the 2009 outlook for interest expense is approximately $450 million to $470 million, net of
investment earnings and minority interest. This estimate of 2009 interest expense includes an estimated impact
from Tenet’s note exchange offer of $50 million to $60 million. The note exchange offer has an anticipated
completion date of early March.
Tenet’s 2009 outlook for income (loss) from continuing operations before income taxes ranges from a
loss of $15 million to income of $135 million. Excluding four items in Table #3 at the end of this release ((1) net
gains (losses) on sales of investment; (2) litigation and investigation costs; (3) gain on exchange of long-term
debt; (4) impairment of long-lived assets and goodwill and restructuring charges), the 2009 outlook for loss from
continuing operations before income taxes ranges from a loss of $135 million to a loss of $70 million. Using an
assumption of 37.1 percent for normalized 2009 income taxes, results in an income tax benefit of $50 million to
$26 million and average expected shares outstanding of 484 million, the 2009 outlook for normalized loss per
share from continuing operations, after excluding the items listed in Table 3 at the end of this release, is in the
range of a loss $0.18 to a loss of $0.09 per share.
-7-

8.
The Company’s 2009 Outlook includes an expectation of adjusted net cash provided by operating
activities from continuing operations to be in the range of $240 million to $315 million, which the Company
defines to exclude income tax payments/refunds, litigation and restructuring payments, and net cash provided by
(used in) operating activities from discontinued operations.
Capital expenditures for continuing operations are expected to be in the range of $400 million to $450
million in 2009.
Adjusted free cash flow from continuing operations for 2009 (based on adjustments provided in Table 4 at
the end of this release) is expected to be in the range of negative $160 million to $135 million.
The outlook range for cash and cash equivalents at December 31, 2009 is $450 million to $550 million.
This assumes the sale of USC Hospital and other cash initiatives aggregating to approximately $308 million to
$343 million.
A reconciliation of outlook adjusted EBITDA to outlook net income (loss) for year ending December 31,
2009 is provided in Table 3; and a reconciliation of outlook adjusted net cash provided by operating activities, and
outlook adjusted free cash flow from continuing operations to outlook net cash provided by operating activities
for the year ending December 31, 2009 is provided in Table 4 at the end of this release.
Management’s Webcast Discussion of Fourth Quarter Results
Tenet management will discuss fourth quarter 2008 results on a webcast scheduled to begin at 10:00 AM
(ET) on February 24, 2009. This webcast may be accessed through Tenet’s website at www.tenethealth.com. A
set of slides, which may be referred to during management’s remarks, will be posted to the Company’s website at
approximately 7:30 AM (ET).
Tenet Healthcare Corporation, through its subsidiaries, owns and operates acute care hospitals and related
ancillary health care businesses, which include ambulatory surgery centers and diagnostic imaging centers. Tenet
is committed to providing high quality care to patients in the communities we serve. Tenet can be found on the
World Wide Web at www.tenethealth.com.
###
Some of the statements in this release may constitute forward-looking statements. Such forward-looking
statements are based on our current expectations and could be affected by numerous factors and are subject to
various risks and uncertainties discussed in our filings with the Securities and Exchange Commission,
including our annual report on Form 10-K for the year ended Dec. 31, 2008, our quarterly reports on Form 10-Q,
and periodic reports on Form 8-K. Do not rely on any forward-looking statement, as we cannot predict or control
many of the factors that ultimately may affect our ability to achieve the results estimated. We make no promise to
update any forward-looking statement, whether as a result of changes in underlying factors, new information,
future events or otherwise.
-8-

21.
TENET HEALTHCARE CORPORATION
Additional Supplemental Non-GAAP Disclosures
(1) Reconciliation of Adjusted EBITDA
Adjusted EBITDA, a non-GAAP term, is defined by the Company as net income (loss) before
(1) cumulative effect of changes in accounting principle, net of tax, (2) income (loss) from
discontinued operations, net of tax, (3) income tax (expense) benefit, (4) net gain (loss) on sales of
investments, (5) minority interests, (6) investment earnings, (7) interest expense, (8) litigation and
investigation (costs) benefit, net of insurance recoveries, (9) hurricane insurance recoveries, net of
costs, (10) impairment of long-lived assets and goodwill, and restructuring charges, net of insurance
recoveries, (11) amortization, and (12) depreciation. The Company’s adjusted EBITDA may not be
comparable to EBITDA reported by other companies.
The Company provides this information as a supplement to GAAP information to assist itself
and investors in understanding the impact of various items on its financial statements, some of which
are recurring or involve cash payments. The Company uses this information in its analysis of the
performance of its business excluding items that it does not consider as relevant in the performance of
its hospitals in continuing operations. Adjusted EBITDA is not a measure of liquidity, but is a measure
of operating performance that management uses in its business as an alternative to net income (loss).
Because Adjusted EBITDA excludes many items that are included in our financial statements, it does
not provide a complete measure of our operating performance. Accordingly, investors are encouraged
to use GAAP measures when evaluating the Company’s financial performance.
The reconciliation of net income (loss), the most comparable GAAP term, to adjusted EBITDA,
is set forth in the first table below for the three and twelve months ended December 31, 2008 and 2007.
(2) Adjusted Free Cash Flow
Adjusted Free Cash Flow, a non-GAAP term, is defined by the Company as cash flow provided
by (used in) operating activities less capital expenditures in continuing operations, new and
replacement hospital construction expenditures, income tax refunds (payments) -- net, payments
against reserves for restructuring charges and litigation costs and settlements, and net cash provided by
(used in) operating activities from discontinued operations. The Company believes the use of Adjusted
Free Cash Flow is meaningful as the use of this financial measure provides the Company and the users
of its financial statements with supplemental information about the impact on the Company’s cash
flows from the items specified above. The Company provides this information as a supplement to
GAAP information to assist itself and investors in understanding the impact of various items on its
cash flows, some of which are recurring. The Company uses this information in its analysis of its cash
flows excluding items that it does not consider relevant to the liquidity of its hospitals in continuing
operations going forward. Adjusted Free Cash Flow is a measure of liquidity that management uses in
its business as an alternative to net cash provided by (used in) operating activities. Because Adjusted
Free Cash Flow excludes many items that are included in our financial statements, it does not provide
a complete measure of our liquidity. Accordingly, investors are encouraged to use GAAP measures
when evaluating the Company’s financial performance or liquidity. The reconciliation of net cash
provided by (used in) operating activities, the most comparable GAAP term, to Adjusted Free Cash
Flow is set forth in the second table below for the three and twelve months ended December 31, 2008
and 2007.
- 21 -